any tax ladies or gentlemen on passive income?
I’m looking for the IRS definition of passive income that might be acquired by persons on social security retirement or disability. I was told passive income is not reportable or taxable as regular income, wages, self employment income, etc. But it would be reportable of course, if the passive income was from stock sales. So, what is the IRS definition of passive income and some examples of the types of income that are considered passive. Thanks.
ok, my question is though taxable, if it is, how does it affects someone’s social security benefits? Does passive income count as "extra" income to s.s. benefits?
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Tagged with: disability • irs definition • Passive Income • self employment income • social security • social security benefits • social security retirement • stock sales • wages
Filed under: Passive Income
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IRS definition: passive income is "all income from passive activities", a passive activity being "Trade or business activities in which you do not materially participate during the year" or "Rental activities, even if you do materially participate in them, unless you are a real estate professional".
My definition: passive income is income from interest, dividends, annuities, royalties, rental income (unless you are a real estate professional), gains from sales, and other similar sources. Basically, if you didn’t work to get the money, it’s probably passive income.
As for being taxable, it usually is.
rental is a passive income, partnerships,etc, have a look at Sch E, back side and see what shows as passive